Stephanie Pomboy: Here Comes QE3

10/29/2011 3:00AM

Stephanie Pomboy, president of MacroMavens, a macroeconomics research firm, says (at Barron's 2011 Art of Successful Investing conference) that the Federal Reserve needs to keep huffing and puffing until the wealth effect starts to create jobs.

This transcript has been automatically generated and may not be 100% accurate.

going ... all my ... oh and ... the second on what ... the ... president ... of MacroMavens in macroeconomic research by the firm ... an editor for million ... many ... so today but I think you ... you mention that I was she ... thinking ... about ... that and and yet it's ... all ... about ... just be that ... of coastline ... this year from that economic standpoint ... we have yet to send the season ... sustainable recovery which her ... employment ... gains in ... you know clearly here we are three years into and ... and he's brought unprecedented ... monetary policy the pair ... and were still look snapping their fingers claimed from Clinton ... campaign kept ... her um ... you know when I'm alone can an icy nominal price increases ... but in real terms financial assets and the real SNP ... just like the real economy ... is ... down twenty cents TN in the financial crisis we basically just Lipstein latest ... plaything Mean Street really sees that in ... coming years what you see when you would take into account its planners ... looks exactly like that he didn't feel very covering ... consumer confidence is an area near the crisis was to them whenever and and with the ... military interested to education ... have no clue what I ... with ... and the worst of all ages ... he ... um what ... so far ... well ... not surprisingly the appetite to borrow is pretty sharply diminished when you just any experience in ... borrowing massively against the largest ... possible Asan out there and having a chilling continue ... time so you know most people are caring going underwater they're in there ... warning this which is ... really to me it's it's been a major obstacle to ... ask ... Cannington in those posts will fund ... term is that we still haven't seen home prices were move on and ... and so every day because by ... home prices continue to decline in the consumer gets even more pronounced ... financially but they also become even more disinclined ... to cover ... my house again ... I mean I guess it's like a chance for some action when the housing bubble burst last ... calm it's and it's insane at the time ... I think you know we were looking at massive surplus inventory into Korean no foreigner half million ... I ... housing inventory ... of versus a normal inventory and link to million ... can the government on out and began its ascent they haven't got that two-and-a-half million ... homes ... and I'll carrier level on fire in Opel and recreational centres whenever anyone until ... it would've been substantially cheaper ... than trying to work through the boring image mayhem in one or ... so and then actually International in a kayak ... I think that would've been a more effective ... solution ... excuse ... me ... on ... and ... I think so just because again we have to stop the disease which is known for his deflationary it created ... into some financial asset inflation which is helping to offset a little in-and-out ... but it's not enough and I think the Fed ... needs to keep ... pumping and pumping ... until eventually this wealth accents up and we do create ... John Sweeney baffling and to spend and eventually for that ... corporations don't include hearing increase include ... usually does ... sch ... on ... why ... I was mystified person he kept saying you know this is crazy people are betting on retail ... the consumer economy where spending is only as good as your access to credit him in prison when this year and I'm wondering if that's been the way it works you know ... you charges on your credit card ... so why when ... investors at the same tiny shorting financials ... and long retelling this hands and then it struck me that there probably ... having this feeling that well let's ask for financials ... is good for ... retail because the people stop paying their bills if they default on their mortgage or no pain and panic turned out ... at present the much for cash just couldn't ... weeks you know it may be happening at the margins aam but it's not sustainable and so on line view that ... the person to talk to ... Boston ... College ... and ... why this initially time ... I ate IC and right now I would be kind of neutral because per stop or waiting to see what Europe decide to do and ... I expect until being some kind of ... derisking in the near future which will release ... weekend hard for anything you know I'm ... aam but over the long term I still like pronouncements this specifically gold ... Tom inimical an old hand I guess I'd be ... time to train to veer away from consumer U S consumer oriented companies and looking for ... companies that are going to benefit from growth in the emerging world ... like large cap multinationals ...